GOL investment signals Delta's Latin American commitment

Delta Air Lines (DL) president Ed Bastian was a prominent figure at last month's Latin American and Caribbean Air Transport Assn. (ALTA) Airline Leaders Forum in Rio de Janeiro, delivering an upbeat address and hobnobbing with Latin American airline executives. He said the region is "a key" to DL's future growth, especially with growth elusive in the US domestic market, where DL and other carriers continue to stick with the "staying disciplined" mantra on capacity even as revenue rises and profits appear healthy.

DL's rhetoric about the Latin American market was backed up with action Wednesday when it announced that it has signed a binding agreement to invest $100 million in GOL to gain preferred shares in the Brazilian airline and a seat on the GOL board of directors. DL already has a similar arrangement with Aeromexico.

"Five years ago, Delta was a US carrier that served global destinations," Bastian told the ALTA conference. Now it is aiming to be "a global airline that serves the US." He pointed out that 75% of air travel to/from Latin America is "concentrated" in the eastern half of the US, "making [DL main hub] Atlanta the ideal gateway."

"The US industry and Delta specifically have gone through a remarkable period of change [characterized by consolidation and cost-cutting] which puts us in a position to compete globally," Bastian said in Rio. "Our desire to grow in Asia and Latin America is unabated."

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